Oil prices remained steady in Asian trade, poised for a fourth consecutive week of gains as they hover near their highest levels since late April. The market is driven by expectations of robust summer fuel demand and some supply worries.
Crude oil futures, which have surged 7% over the past four weeks, were down 2 cents to $87.41 a barrel, while U.S. West Texas Intermediate (WTI) crude futures, up 9% over the same period, edged up to $83.97, gaining 9 cents from Wednesday's close. With the U.S. market closed for the Fourth of July holiday, trading was thin, and there was no settlement for WTI.
This week, oil prices were boosted by strong summer demand forecasts in the United States, the world's largest oil consumer. Analysts at ANZ Research noted that market sentiment was also lifted by strong mobility indicators and escalating geopolitical tensions in the Middle East.
The U.S. Energy Information Administration (EIA) reported a significant 12.2 million barrels draw in inventories last week, far exceeding analysts' expectations of a 700,000 barrels draw. This unexpected drop in inventories supported oil prices.
Additionally, recent U.S. data showed an increase in first-time applications for unemployment benefits and rising jobless numbers, which could potentially prompt interest rate cuts by the Federal Reserve and provide further support to oil markets.
On the supply side, Multibagger reported that Russian oil producers Rosneft and Lukoil are set to reduce oil exports from the Black Sea port of Novorossiisk in July. Meanwhile, Saudi Aramco cut the price for Arab Light crude sold to Asia in August, highlighting the pressure faced by OPEC producers amidst growing non-OPEC supply.
Traders are also monitoring the conflict in Gaza and elections in France and the UK, which could impact oil market dynamics.
Analysis:
The article discusses the current state of oil prices, which are holding near their highest levels since April due to strong summer demand expectations and supply concerns. Factors such as a draw in inventories, geopolitical tensions, and potential interest rate cuts by the Federal Reserve have contributed to the recent price surge. Additionally, supply cuts by Russian and Saudi Arabian oil producers, along with ongoing conflicts and elections, are influencing market sentiment.
For investors, this information highlights the importance of monitoring global events and supply dynamics that can impact oil prices. Understanding these factors can help individuals make informed decisions regarding their investments and financial strategies.